Government posts first July surplus in three years as tax receipts swell

A record month for income tax receipts helped the government record its first July surplus on the public finances for three years, according to official figures.

They stated: “July’s figure means that borrowing in the first four months of the fiscal year of £24bn was 24% lower than the £31.4bn seen last year – a bigger drop than the 21% the OBR expects to see for the year as a whole”.

Public finances have traditionally been in surplus in July, but tepid wage growth in the previous two years depressed the usual surge in payments from individuals filing self-assessed income tax returns.

One of the biggest contributors was a major boost in the amount of income tax – total revenues were £18.5bn, the highest since 1997.

Speaking this morning, Mr Osborne said: ‘With more tax coming in this month than the Government spent, borrowing so far is nearly £71/2 billion lower than previous year ‘. If the trend continued, the full-year deficit could undershoot the OBR forecast by around £2bn.

George Osborne this morning hailed a bumper month for tax receipts as Britain’s public sector finances recorded a July surplus for the first time since 2012.

Mr Osborne has pledged to eliminate Britain’s budget deficit within the next three years. But with debt over 80% of GDP the job is not done.

He added: ‘That is why we continue to work through our long-term economic plan to achieve a budget surplus and secure a better economic future for working people’.

Public sector net debt, excluding state-controlled banks, was 1.505 trillion pounds in June, equivalent to 80.8 percent of GDP. Corporation tax takings also rose almost 4 per cent to £6.8bn.

Osborne has vowed to wipe out a deficit of nearly 5 percent of gross domestic product within the current five-year parliamentary term and run surpluses during “normal” times thereafter.

“There are eight months of the fiscal year to go and revisions to estimates of borrowing in the early months of the year are often large”.